"The sell-off followed a robust rally in China's stock market earlier this year, which is now unwinding ahead of the Lunar New Year holidays starting next week, as investors lock in profits, said Kevin Leung, global investment strategy director at Haitong international Securities.

"The earlier gains were due to very persistent inflow into Asia emerging equities for 'a long time,' particularly 'large and euphoric inflows' driving valuations up, said Jonathan Garner, Morgan Stanley's chief Asia and emerging equity strategist."